The US Fed painted a bleak picture of the US economic outlook this week, while the UK reported a 20.4 per cent drop in GDP in April on Friday – the biggest fall ever seen.
The business world is feeling the pain, as it is itching to get back up and running. Warnings are heeded that some parts of the economy might be ‘scarred’ and not pick up again post-Covid 19 within the foreseeable future.
As reported by the FT today, KKR, the most active private equity investor during the economic crisis, having spent around USD18 billion on deals since February, has asked its advisers to share the economic pain. The US firm wants its long-term legal and financial partners to agree to a discount of “at least” 15 per cent this year with may believed to have accepted the request.
The buyout group recently agreed to acquire a 60 per cent stake in Coty’s professional beauty division. KKR was also part of a consortium of companies to take control of Spanish telecoms provider MasMovil in a EUR5 billion deal, including other large transactions.
As economies introduce measures to slowly open up again, we are beginning to see a relaxation to the strict lockdown measures. In the UK, Business Secretary Alok Sharma stated that pubs and restaurants could reopen from 4 July 2020, at the earliest and in a limited capacity, provided that the R rate is kept below 1 and other factors remain on track.
As we begin thinking about what a post-Covid-19 society might look like for the global financial industry, more and more private equity firms and managers are considering their own influence.
We invite you to read the results of a poll conducted during the recent PEWLive North America digital summit which asked some of the most active and respected professionals in the private equity space today to share their views on current market conditions, the deal making climate, and the operational challenges and possibilities brought on by Covid-19.
The pandemic and the recent social and political protests have prompted us all to consider how our actions impact our communities. In our feature interview this week, we hear from Anand Prasanna, managing partner of Iron Pillar, on the effect that technological advances have had on politics, the role of impact investing in private equity and why it’s time for VCs to focus more on ESG factors.
Karin Wasteson
Editor, Private Equity Wire